test, good practice will be for such tests to extend to the technical and
professional competence of board members, including general governance and risk management skills. Also, to perform better boards
will need to be supported in key areas. To promote competent and
more effective boards, board members should have access to relevant
training programs and subject themselves to annual external board
evaluations, thereby instituting a framework for improvement.
Relatedly, giving risk managers more teeth is still a matter to be addressed. This has been done successfully where the Chief Risk Officer
(CRO) reports directly to the CEO or where the CRO has a seat on
the board or management committee. To have a strong independent
voice, the CRO should have a mandate to bring to the attention of
both line and senior management, as well as the board, any situation
that could materially violate the bank’s risk-appetite guidelines.
Enterprise Risk Management: Enterprise Risk Management
needs to be much more aggressively embraced. The research shows
that the banks that avoided major problems in the crisis displayed a
more comprehensive approach to viewing firm-wide exposures and
risk, sharing both quantitative and qualitative information more efficiently across the firm and engaging in more effective dialogue across
the spectrum of the management team.
Regulatory Frameworks: There is room for improvement in regulatory frameworks: Weaknesses in regulation and regulatory frameworks also featured in the blame list for the financial crisis. In many
cases, the regulator’s internal processes did not lend to timely and
These banks employ more adaptive rather than static risk measurement processes and systems that could very quickly change underlying assumptions to reflect current circumstances. They also employed
more effective stress testing and scenario analysis, and in short they
exhibited stronger governance systems since the information was also
passed upwards to the board. Obviously size and complexity feature
here, but going forward stress testing must form an integral part of
a bank’s risk management practice and managers of all disciplines
should be involved so that outcomes have a meaningful impact on
business decisions.
Regional Scale Ratings
of Caribbean Sovereigns
Sovereign
Regional Scale
(Foreign Currency)
Government of Trinidad & Tobago
CariAA+
Government of Barbados
CariBBB+
Government of Anguilla
CariBBB+*
Government of Saint Lucia
CariBBB
Government of Dominica
CariBB+
*Benefits from significant credit uplift as a United Kingdom (UK) overseas territory
Regional Scale Ratings of Caribbean Financial Institutions
Country
Regional Scale (Foreign Currency)
Republic Financial Holdings Ltd.
Trinidad & Tobago
CariAA+
Sagicor Investments Jamaica Ltd.
Jamaica
CariBBB-
Eastern Caribbean Home Mortgage Bank
St. Kitts
CariBBB+
National Commercial Bank Jamaica Ltd.
Jamaica
CariBBB
NCB Capital Markets Limited
Jamaica
CariBBB-
Dominica
CariBB+
Jamaica
CariBBB+
Trinidad & Tobago Mortgage Finance Company Ltd.
Trinidad & Tobago
CariAA-
Bourse Securities Ltd.
Trinidad & Tobago
CariA-
Eastern Credit Union Co-operative Society Ltd.
Trinidad & Tobago
CariBBB
RHAND Credit Union Co-operative Society Ltd.
Trinidad & Tobago
CariBBB-
The Beacon Insurance Company Ltd.
Trinidad & Tobago
CariA-
Venture Credit Union
Trinidad & Tobago
CariBBB-
Home Mortgage Bank
Trinidad & Tobago
CariA
Financial Institution
Dominica Agricultural, Industrial & Development Bank
Development Bank of Jamaica Ltd.
National Scale
Sagicor Life (Jamaica) Ltd.
Jamaica
jmAAA
17